Correlation Between Medtronic PLC and Siemens Healthineers
Can any of the company-specific risk be diversified away by investing in both Medtronic PLC and Siemens Healthineers at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Medtronic PLC and Siemens Healthineers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medtronic PLC and Siemens Healthineers AG, you can compare the effects of market volatilities on Medtronic PLC and Siemens Healthineers and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Medtronic PLC with a short position of Siemens Healthineers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medtronic PLC and Siemens Healthineers.
Diversification Opportunities for Medtronic PLC and Siemens Healthineers
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Medtronic and Siemens is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Medtronic PLC and Siemens Healthineers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Healthineers and Medtronic PLC is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Medtronic PLC are associated (or correlated) with Siemens Healthineers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Healthineers has no effect on the direction of Medtronic PLC i.e., Medtronic PLC and Siemens Healthineers go up and down completely randomly.
Pair Corralation between Medtronic PLC and Siemens Healthineers
Assuming the 90 days horizon Medtronic PLC is expected to under-perform the Siemens Healthineers. But the stock apears to be less risky and, when comparing its historical volatility, Medtronic PLC is 1.29 times less risky than Siemens Healthineers. The stock trades about -0.22 of its potential returns per unit of risk. The Siemens Healthineers AG is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 5,060 in Siemens Healthineers AG on September 25, 2024 and sell it today you would earn a total of 150.00 from holding Siemens Healthineers AG or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Medtronic PLC vs. Siemens Healthineers AG
Performance |
| Timeline |
| Medtronic PLC |
| Siemens Healthineers |
Medtronic PLC and Siemens Healthineers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medtronic PLC and Siemens Healthineers
The main advantage of trading using opposite Medtronic PLC and Siemens Healthineers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medtronic PLC position performs unexpectedly, Siemens Healthineers can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Siemens Healthineers will offset losses from the drop in Siemens Healthineers' long position.| Medtronic PLC vs. Abbott Laboratories | Medtronic PLC vs. Stryker | Medtronic PLC vs. Boston Scientific | Medtronic PLC vs. Siemens Healthineers AG |
| Siemens Healthineers vs. Abbott Laboratories | Siemens Healthineers vs. Medtronic PLC | Siemens Healthineers vs. Stryker | Siemens Healthineers vs. Boston Scientific |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |